Frank Boosman's irregular but not infrequent thoughts

kickAAS

I've written about agricultural subsidies before. In July of last year, I wrote:

In 1984, New Zealand's government ended all farm subsidies, with a phase-out period of only one year. What happened next?

Forced to adjust to new economic realities, New Zealand farmers cut costs, diversified their land use, sought non-farm income opportunities and altered production as market signals advised -- for example, by reducing sheep numbers and boosting cattle ranching. Farmers were aided on the cost side as input prices fell, because suppliers could no longer count on subsidies to inflate demand. The striving for greater efficiency also supported environmental protection as marginal land farmed only to collect subsidies was replaced with native bush, and overuse of fertilizers ended when fertilizer subsidies were removed. The Federated Farmers of New Zealand believe their country's experience "thoroughly debunked the myth that the farming sector cannot prosper without government subsidies."

The result of all this was that the value of New Zealand's farm output has risen 40 percent in constant dollars since the 1980s. New Zealand's average increase in farm productivity per year has risen from one percent before reform to six percent since.

While the US radically increases farm subsidies -- and while Europe debates extending its massive Common Agricultural Policy (CAP) to new European Union applicants -- New Zealand motors along, spending nothing on subsidies and enjoying more efficient farming as a result. In a report on French shepherds broadcast on NPR's All Things Considered (available only as RealAudio), commentator Nancy Coons recounted the following comment made by a French shepherd on a sheep drive:

"We must all [drive sheep across southern France] every year, for no other reason than to say, 'We're here. If you continue to buy the lambs shipped in from New Zealand, we won't be here any longer.'"

The irony of this is palpable. Billions of dollars in farm subsidies, and still French shepherds are increasingly unable to keep pace with competitors halfway around the world -- not low-cost Third World producers, nor massively subsidized farmers, but highly efficient, unsubsidized, First World competitors.

Subsidies enable farmers to grow crops and sell them without regard to production costs or market prices. In the US, our elected officials become angry when they believe that other countries are doing this in steel, or microprocessors, or textiles. They label this practice "dumping" and retaliate with tariffs and quotas. Meanwhile, Western governments spend $300 billion per year on agricultural subsidies with far worse effects and seem to see no inherent contradiction in their actions.

It's time for this practice to end. The popularity of kickAAS is a good sign that people are starting to understand the problem.